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European Union governments took a further step towards injecting more competition into the European Defence Equipment Market today, agreeing that a voluntary, non-binding would be fastest way to make progress.

The Steering Board of the European Defence Agency, meeting at the level of National Armaments Directors of the 24 participating Member States, examined a set of principles drawn up by the Agency and instructed it to turn the ideas into a draft Code of Conduct for possible approval by defence ministers in November.

“The Agency’s work to date suggests that the introduction of the proposed intergovernmenta lregime would be a major step forward, bringing a real European Defence Equipment Market intobeing,” said Eero Lavonen of the Finnish Defence Ministry, who chaired the meeting on behalf of Javier Solana, the Head of the Agency.

The Steering Board considered the results of an EDA fact-finding study into the use by participating Member States of Article 296 of the EU Treaty to exempt purchases of defence equipment from the normal internal market rules requiring cross-border competition, and agreed that it underlined theneed to inject more competition into this area.

The Steering Board stressed that any Code of Conduct would have to contain provisions covering the security of supply for one Member State purchasing vital equipment from a company based inanother member state, the protection of classified information, and opportunities for small-and medium-sized enterprises with specialist capabilities.

“The essence of the Code of Conduct would be transparency and mutual accountability,” said NickWitney, the EDA’s Chief Executive. “More opportunities for companies to do business across EU borders would be a major boost for Europe’s Defence Technological and Industrial Base.” – headded.